Australia must prepare now for climate-related disasters or pay more later, insurance regulator says

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The cost of responding to bushfires, storms and cyclones after the fact is likely to be 11 times greater, Apra warns
Show caption A burnt-out property in January 2020. The Australian regulator is concerned insurance could become unaffordable or unavailable in parts of the country. Photograph: James Gourley/AAP Australian economy Australia must prepare now for climate-related disasters or pay more later, insurance regulator says Adam Morton Environment editor @adamlmorton Wed 14 Oct 2020 06.12 EDT Share on Facebook

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Australia's banking and insurance regulator has estimated the country will need to spend about $3.5bn a year to limit damage from climate-related natural disasters, warning the cost of responding to them after the fact is likely to be 11 times greater.

In a speech on Wednesday, Geoff Summerhayes, an executive board member of the Australian Prudential Regulation Authority, said the cost of pre-emptive action to avoid the impact of disasters exacerbated by the climate crisis was far cheaper than dealing with the aftermath.

Addressing the issue of rising insurance premiums in northern Australia due to an increasing number of claims caused by storms and cyclones, Summerhayes said Apra was concerned general insurance could become unaffordable or unavailable in parts of the country.

He said it heightened the need to both cut greenhouse gas emissions and increase community resilience to extreme climate events, such as last summer's catastrophic bushfires.

"Investing in the types of resilience, mitigation and hazard reduction measures needed to better protect Australian communities – and keep insurance affordable and accessible – comes at a cost," he told an Australian Business Roundtable webinar. "But as we witnessed last summer, failing to take action can be far more costly in the…
Adam Morton
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